Having spurned Russian oil for years, and with the energy powerhouse still under a raft of international sanctions, Indonesia plans to buy it again in September.
Three traders told Reuters that the Indonesian state-controlled refiner Pertamina has added Russian oil grades to its tender list to buy September crude.
Although it has not been buying Russian oil since well before the Kremlin’s full-scale invasion of Ukraine in 2022, the outbreak of war did further dissuade Indonesia from buying Russian oil.
Indonesia did not join in the sanctions on Russia, which include a price cap mechanism and an EU embargo on Russian oil.
Countries such as China, India and Turkey have since profited from discounted Russian oil hitting international markets and raised their imports.
According to the sources, Pertamina has asked for Russian Urals, along with sour grades Kirkuk, Jubilee and Al Shakheen, and several others. The Russian sources will arrive at its Cilacep refinery between the 15th and 17th of September.
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One of the sources said that Pertamina will only complete the transactions if the Russian oil is sold at a price under the price cap regulations.
In December 2022, Western nations placed a price cap of $60 per barrel on Russian oil to try to minimise Moscow’s revenue streams.
The price cap prohibits shipping, insurance and reinsurance companies from handling cargoes of Russian crude around the globe, unless it is sold for less than the price cap.
On Tuesday, a spokesperson for Permatina’s refinery unit said that the company will make sure it complies with relevant regulations when its buys the Russian oil and will only purchase crude that aligns with its refinery specifications.
“If we purchase crude oil from Russia, it will be done under price cap mechanism,” spokesperson Hermnsyah Nasroen said.
According to the Moscow Times, Pertamina was offered Russian crude at a 30% discount in 2022, but it did not go ahead with the transaction.
